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Audit of Boise Farm Reveals More Fraud: Businesses That Helped City Employees Violate City Policies Could Face Sanctions

Posted on: Sunday, 4 June 2006, 09:00 CDT

By Brad Hem, The Idaho Statesman, Boise

Jun. 4--Boise taxpayers subsidized a former city employee's cattle operation at the city-owned 20-Mile South Farm, and farm employees ignored city purchasing rules to avoid scrutiny, costing the city thousands of dollars over the past five years, according to a recently released audit.

Boise Mayor Dave Bieter and some City Council members say the situation has been dealt with and new procedures are in place to prevent future problems. But city officials also say there might be more consequences, including possible personnel action against additional city employees and sanctions against businesses that sold or rented equipment to the farm and helped employees violate city policies. The city uses the farm, managed by the Public Works Department, to dispose of treated city sewage.

Former farm manager David C. Skinner resigned in October in the midst of the city's investigation. He later pleaded guilty to misdemeanor theft.

His six-month jail sentence was suspended pending successful probation, and he was ordered to pay $3,380.04 in restitution to the city. But the audit indicates that was just a fraction of the financial benefit he received at taxpayers' expense.

Auditors found Skinner billed the city $858.36 for feed corn, $366.42 for salt blocks and $5,511.56 for insecticide and equipment used for keeping flies off cattle.

A second farm employee, Brad Holmes, is charged with misdemeanor bid-splitting and faces an August trial.

Auditors also found several instances when equipment was purchased in installments less than $1,500. Purchases of $1,500 or more would have required purchase orders, resulting in greater management scrutiny.

In some cases, auditors said vendors willingly complied with farm employees' requests to split invoices to dodge detection. Those vendors could face city penalties.

Some of the potentially criminal actions, such as alleged invoice splitting and theft, happened years ago and were not discovered until after the statute of limitations ran out, so charges could not be filed, according to auditors.

In other cases, prosecutors indicated they could not prove charges beyond a reasonable doubt, council members said.

"This was a major investigation. It certainly tarnishes the reputation of the city," Councilman Jim Tibbs, a former Boise police officer and former acting police chief.

Concerns about farm mismanagement first arose in March 2005 when employees reported problems to management, according to Bieter. Management looked into it and hired the auditors.

In June 2005, the council tapped the city's Office of Internal Audit to investigate the farm. The office was created in 2003 after the City Hall spending scandal that forced former Mayor Brent Coles from office. It issued a report May 26.

"It was a screwed-up mess. We aren't done with it yet," Councilman Vern Bisterfeldt said. Potential personnel action and new city policies would be the next step.

Auditors said there were purchasing irregularities that should have been caught earlier by mid-level managers.

"What bothers me is the management that could have caught it and didn't," said Councilman David Eberle, who intends to question Public Works Department officials about the lapse.

Bieter spokesman Michael Zuzel called the farm problems a "great learning experience" for the city and stressed that new procedures have been added to prevent future mismanagement.

Public Works purchases now receive greater scrutiny. A new biosolids manager has been hired to provide hands-on management at the farm. Auditors inspected farm assets and corrected inventory lists.

"We've put the processes in place to make sure it doesn't happen again," Council President Maryanne Jordan said.

The city bought about 4,000 acres of farmland east of Kuna throughout the 1990s. Sewer waste from city treatment plants is taken to the farm and used as fertilizer for feed crops, and the crops are sold at market.

City officials still may decide to punish vendors if they were complicit in farm employees' attempts to defraud taxpayers. Sanctions could include suspending a business's ability to bid for city projects or equipment for three months to three years. "We have options, but we want to be sure and careful before we tackle any of those things," city purchasing manager Bill Albert said.

Eberle said he suspects vendors were simply trying to accommodate their customers. He said he wants more information before he recommends punishment.

Others council members shared that view, but said a business that is found to have been part of the problem should face penalties.

"If vendors are complicit in this sort of affair, there should be sanctions against them," Councilman Alan Shealy said.

Contact reporter Brad Hem at bhem@ idahostatesman.com or 377-6402.

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Copyright (c) 2006, The Idaho Statesman, Boise

Distributed by Knight Ridder/Tribune Business News.

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Source: The Idaho Statesman, Boise

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